Capital Corner: The Scott Heard Round the World

Jim Brandenburg, CPA, MST Shareholder - Tax   email | bio
February 2010

The unexpected victory by Republican Scott Brown in the Massachusetts special election altered the political landscape in Washington. The filibuster-proof majority held by the Democrats in the Senate is now one vote short. Brown campaigned against the health care reform bill that has dominated the legislative and political calendars for the past year. His victory has caused politicians on both sides of the aisle to take notice, especially with mid-term elections looming this fall.

The administration and congressional leaders are suddenly rethinking their strategies. With the filibuster now in play and voter sentiment for health care reform uncertain, Democratic leaders are considering the following strategies on health care reform:

"One if by Land." Fast track. Initial suggestions were that the health care reform bill might be fast-tracked and any outstanding issues quickly resolved so the bill could be voted on by the Senate prior to Brown taking office. Or, the Senate bill passed in December could be pushed over to the House and voted on without any changes being permitted by the House. These swift approaches face many obstacles, and the House would like input on any final legislation. Neither option appears likely.

"Two if by Sea." Reconciliation. This term connotes a conciliatory approach, but this is not a compromise or bipartisan effort. It would elevate the partisan politics to a new level of animosity, and it has been dubbed by many as the "nuclear option." Bills moved under the reconciliation process are insulated from Senate roadblocks such as filibusters. Debate is restricted and passage only requires a 51 vote majority, not the 60 votes under a filibuster. Separate bills could be employed to fall under reconciliation protection, with other measures following normal approval process. There are many practical and political considerations if reconciliation is adopted, however, Senate Majority Leader Harry Reid mentioned that reconciliation is a possibility for pushing ahead with health care reform.

"Three if by (?)" Starting over. Paul Revere would have been puzzled by three lamps in the Old North Church, and it would be equally as confusing if Congress and the administration started over with health care reform. Even though significant political capital has been expended to enact health care reform, starting over could allow legislation to emerge that would allow politicians to claim victory, especially in this election year. The emerging legislation may be less significant in scope than what the House and Senate have already passed, but smaller, less contentious legislation may attract some bipartisan support and ultimately get enacted. Some of the provisions in this scaled back package might involve insurance market reforms and small business incentives.

The shocking upset in Massachusetts has created a lull in Washington while politicians are rethinking their strategies for health care reform and other initiatives, but with mid-term elections around the corner, the fireworks are sure to resume.